Credit reporting is subject to regulation because of the sensitive nature of the information being exchanged. The results of credit reports put individuals at risk of losing opportunities in the form of loans and job offers, and even housing. The Fair Credit Reporting Act exists to both preserve the right to vet prospects before making important decisions, as well as to protect the rights of individuals.

Terminology

In the FCRA, rights and responsibilities are established for three parties:

• Consumers (individuals)
• Furnishers (the entities providing the information to CRAs about consumers’ creditworthiness)
• Users (entities that request the credit reports of consumers in the course of evaluating them for some purpose)

Credit Reporting Agencies

So what are CRAs? Credit reporting agencies are the entities that collect and sell credit and other financial information about consumers. By engaging in the practice of procuring and using credit for transactions, we agree to supply our credit profiles to CRAs.

The three national CRAs in the U.S. are Experian, Trans Union, and Equifax. Smaller CRAs exist with a concentration on certain regions of the country. Other organizations considered to be CRAs include:

• Inspection bureaus (background check providers and companies that sell information to insurance companies)
• Tenant screening companies
• Check approvals companies
• Private investigators, detective agencies, collection agencies, and college placement offices can also be considered CRAs under the legal definition

What Do They Do?

CRAs provide consumer credit reports for any purpose that the consumer approves of. This can include determining consumer eligibility for:

• credit
• insurance
• employment
• tenancy
• professional licensing
• paying child support

The report itself contains basic identifying information as well as:

• financial information (estimated income, employment, bank accounts, value of assets)
• public records information (arrests, bankruptcies, tax liens)
• credit accounts with status, consumer’s payment habits, etc.
• items in collections, unpaid or disputed bills
• employment history
• the number of requests for credit reports on record, including identity of requestors
• medical bills and information
• notes